I am pleased to present the 2001 executive operating budget for your consideration. As in the past several years, preparation of this document presented challenges in balancing the expressed needs and desires of our citizens for service provision with the expressed direction to control growth in property taxes.

I had hoped to present a budget with a total expenditure increase tied to inflation plus growth, 5% above the 2000 expenditures, including library and debt service. Although the executive budget has a "cushion" of $650,000 under the expenditure restraint program limit (which would allow a 5% increase over 2000 general fund expenditures), the budget represents a 5.87% expenditure increase over the 2000 level.

A number of factors contributed to this increased expenditure level. In 2001, we must provide annualized funding for the numerous new positions that were converted from seasonal to full time this year. We must provide full year funding for the new Alicia Ashman branch library which is opening this month as well as for full year funding for the newly remodeled Hawthorne branch library and East Side Health Department offices. We are also committed to partial year funding for the West District Police offices for which we broke ground last month. These are additional operational costs that the new facilities approved in previous budgets create for the 2001 operating budget.

In addition to decisions made in prior years regarding facilities and staffing levels, 2001 expenditures are higher due to anticipated increased fuel costs and $1,500,000 attributable to increased health insurance premiums.

During the course of calendar year 2000, agencies were required to review their budgets and make adjustments for the increased fuel prices and unanticipated costs for paratransit. To date, agencies have done an excellent job in undertaking cost controlling measures. However, the unanticipated costs this year means that a smaller amount of fund balance can be applied to the 2001 budget ($1,500,000 instead of $3,000,000 for 2000 and $3,100,000 for 1999).

The fuel issues of 2000 have also made it apparent that the contingent reserve fund should be increased. $1,000,000 has been allocated for 2001, $200,000 more than this year. Note that this is little more than 0.5% of the general fund expenditures in the budget.

The executive budget can best be described as one that maintains the status quo: There are no dramatic new programs or cuts proposed. Highlights include:

Continuation of the TEST program

Continued participation in the Safe Communities Coalition

Continued funding for study circles on race relations, youth integration programming and outreach to the Southeast Asian community

Addition of one additional police officer funded by the COPS program

Operation of Madison and Hartmeyer Ice Arenas with a subsidy level at 95% of 2000 budget

Continued funding for the Safe Harbor program

Assignment of a Principal Engineer to coordinate the city's energy sustainability plans on a half-time basis

The Transit and Parking Utility is directed to review Metro's budget and, through a combination of route changes and fee adjustments, reduce expenditures by $1,000,000 for a net increase in City subsidy of $1,000,000

Sunday hours at the Schwab Library are eliminated due to a cut in funding by Dane County Library Services

The Fairchild Building Activities Center is closed as of April 1, 2001

Monona Terrace and the Civic Center will jointly fund a reporting system to monitor the impacts of the Overture Center and Monona Terrace Community and Convention Center

In addition to the increase in Payment for Municipal Services which is estimated at $1,200,000, additional revenues and reallocation of funds proposed include:

Use of transient occupancy tax for partial funding of CitiARTS grants program

Use of transient occupancy tax to fund Badger State Games

Increase of $25 in ambulance fee and new charge for ambulance mileage

Fees for fire department plan review and reinspection fees

Increases in fees for various programs administered by the Health Department

A Payment in Lieu of Taxes (PILOT) has been assessed to Monona Terrace for the first time

Increases in large item appliance collection fees and implementation of a tire collection fee

I look forward to working with members of the Council and the public to fully discuss this budget proposal and towards the adoption of a 2001 budget which reflects the needs and resources of the City of Madison.